International Trade Theory And Policy 10th Edition By Krugman – Test Bank

International Economics, 10e (Krugman/Obstfeld/Melitz)

Chapter 1   Introduction

1.1   What Is International Economics About?

1) Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

A) “Of the Balance of Trade,” David Hume, 1776

B) “Wealth of Nations,” David Hume, 1758

C) “Wealth of Nations,” Adam Smith, 1758

D) “Wealth of Nations,” Adam Smith, 1776

E) “Of the Balance of Trade,” David Hume, 1758

Answer:  E

Page Ref: 1

Difficulty:  Easy

2) From 1960 to 2012

A) the U.S. economy roughly tripled in size.

B) U.S. imports roughly tripled in size.

C) the share of US Trade in the global economy roughly tripled in size.

D) U.S. Imports roughly tripled as compared to U.S. exports.

E) U.S. exports roughly tripled in size.

Answer:  C

Page Ref: 1

Difficulty:  Easy

3) The United States is less dependent on trade than most other countries because

A) the United States is a relatively large country with diverse resources.

B) the United States is a “Superpower.”

C) the military power of the United States makes it less dependent on anything.

D) the United States invests in many other countries.

E) many countries invest in the United States.

Answer:  A

Page Ref: 2

Difficulty:  Easy

4) Theories of international economics from the 18th and 19th Centuries are

A) not relevant to current policy analysis.

B) only of moderate relevance in today’s modern international economy.

C) highly relevant in today’s modern international economy.

D) the only theories that actually relevant to modern international economy.

E) not well understood by modern mathematically oriented theorists.

Answer:  C

Page Ref: 2

Difficulty:  Easy

5) An important insight of international trade theory is that when two countries engage in voluntary trade 

A) one country always benefits at the expense of the other.

B) it is almost always beneficial to both countries.

C) it only benefits the low-wage country.

D) it only benefits the high-wage country.

E) it is almost never beneficial to both countries.

Answer:  B

Page Ref: 4

Difficulty:  Easy